Bellevue Gives Multifamily Developers a Tax Boost
- Jul 02, 2015
The city of Bellevue recently adopted an important piece of legislation that should prove vital to the area’s housing market. Bellevue follows a number of other Washington cities that have already used the measure to improve their housing markets. With neighboring Seattle in a constant search for the best scenario for its affordable housing situation, Bellevue is accessing a tax break that is available to a number of cities in the state.
Although in place at the state level since 1995, the Multi-Family Tax Exemption was used by a small number of cities in the area that employed the measure to encourage residential development while also ensuring that the affordable housing stock would be enlarged as a result. The measure was updated nine years ago, as the incentives were expanded and the number of cities able to access the MFTE was also raised.
As per the 2006 version of the MFTE, residential development providing a minimum of 20 percent affordable units could benefit from a 12-year tax exemption on all new units. Developments providing other benefits, which may include less than 20 percent affordable housing, may receive an eight-year exemption. Burien, Everett, Kenmore, Kirkland, Mercer Island, Renton, Seattle, Shoreline, Spokane and Tacoma have all adopted the exemption.
In Bellevue, developers that allocate at least a fifth of their units to low-income residents would be able to get the tax break. This measure will be applied to developments in downtown Bellevue, Crossroads Village, Eastgate, the Wilburton commercial district, as well as the Bel-Red area. Units here will have to be directed toward those earning less than $38,000 a year.